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HomeMy WebLinkAboutAgreement A-20-407 with UP Holdings California LLC.pdfrev. 9/2020 1 MEMORANDUM OF UNDERSTANDING ENTITIES The County of Fresno ROLES Lead Applicant UP Holdings California, LLC Co-Applicant/Housing Developer/Owner RH Community Builders LP Co-Applicant/Housing Developer/Owner RH Community Builders LP Property Manager UPA, LLC Compliance Agent This Memorandum of Understanding (MOU) is hereby entered into on October 6, 2020 between the County of Fresno (County); UP Holdings California, LLC (UP Holdings); UPA, LLC (UPA); and RH Community Builders (RH). WHEREAS, the California Department of Housing and Community Development (HCD) created Project Homekey (Homekey) as the largest expansion of housing for people experiencing homelessness in recent history; and WHEREAS, Homekey made available grant funding to counties, cities, and governmental entities, acting independently or in partnership with nonprofit or for profit entities, to purchase and rehabilitate housing including hotels with the intention of converting existing structures into permanent, long-term housing for people experiencing or at risk of experiencing homelessness; and WHEREAS, HCD requires an MOU between Homekey co-applicants; and WHEREAS, the purpose of this MOU is to encourage cooperation between UP Holdings, UPA, RH, and County to further detail the separate and distinct roles and responsibilities of each party with respect to Crossroads and the award Homekey funds; and WHEREAS, UP Holdings and RH will own and make available Crossroads; and WHEREAS, UP Holdings and RH will work together as Developers and Owners to acquire, rehabilitate, own and operate Crossroads under the Homekey Program with the intention to immediately seek permanent financing sources for a complete scope rehabilitation; and WHEREAS, UP Holdings, UPA, RH, and County share the goal of reducing barriers to permanent housing; and WHEREAS, UP Holdings, UPA, RH, and County commit to future policies for Crossroads, including but not limited to, an Affirmative Fair Housing Marketing Plan, a Tenant Selection Plan and a Management Agreement as they apply to the various team members. NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions herein contained, the parties hereto agree as follows: Agreement No. 20-407 rev. 9/2020 2 I.ROLES AND RESPONSIBILITIES Roles of UP Holdings, UPA, RH, and County UP Holdings, RH, and County (parties) must work as a team to effectively and efficiently meet shared goals for Homekey. This collaboration will require exceptional, thorough and timely communication between the parties. However, the parties to this MOU have and understand their separate and distinct responsibilities. All parties shall ensure compliance with State and Federal housing regulations and all programmatic requirements specific to Homekey. The parties agree to advise one another of highly pertinent matters relating to the scope of roles and responsibilities set forth in this MOU. A.County: County will serve as Lead Applicant with fiscal responsibility for Crossroads and is committed to five years of operational funds from a variety of sources that are both tenant-based and/or project-based; only available to households who are also Homekey-eligible. County commits to provide a combination of resources to Crossroads to ensure financial feasibility, which shall include, but are not limited to, subsidized rental assistance sized at current-in-time United States Department of Housing and Urban Development (HUD) Fair Market Rent applicable to the final unit mix for Crossroad’s permanent units. County will coordinate contracted supportive services to Crossroads residents, and linkage and referral to other essential services. County agrees to coordinate contracted case management as tenants require, either onsite or through community linkages. B.UP Holdings and RH: UP Holdings and RH will be co-developers and co-owners of Crossroads, and jointly responsible for site operations and onsite improvements. A California limited partnership (the "Partnership") will be formed to own and develop Crossroads. RH, or its affiliate, will be a general partner owning 60% of the general partner interest. UP Holdings California, LLC, or its affiliate, will be a general partner owning 40% of the general partner interest. RH, or its affiliate, will be responsible for managing Crossroads through its financial closing, managing other professionals or consultants for the predevelopment and development services of Crossroads, managing Crossroads through its construction, selecting and managing service and operating contracts as they relate to Crossroads, and engaging in outreach to seek political support from the community and local government for the development of Crossroads as a permanent affordable housing property. UP Holdings will be responsible for interfacing and coordinating with HCD, structuring the construction financing and ensuring Crossroads' compliance with all lenders and the equity investor, and engaging in community outreach to seek local support from the community and local government for the development of Crossroads as a permanent affordable housing property. The Partnership will pay RH and UP Holdings a fee to develop Crossroads (the "Developer Fee"). The Developer Fee will be paid 60% to RH and 40% to UP Holdings. C.UPA and RH: UPA and RH will be Co-Property Managers of Crossroads. The role of RH will be that of Property Manager, managing and addressing tenant, property and lease related issues. RH will rev. 9/2020 3 be responsible for overall operations of Crossroads including janitorial, maintenance, repairs, and other related services. Such activities and responsibilities will be carried out by an on-site tenant manager employed by RH. UPA will be that of Compliance Agent, responsible for the overall compliance of Crossroads including but not limited to Internal Revenue Service requirements for the Section 42 tax credit projects under HCD and tenant file audits. The Partnership will pay RH and UPA a fee to manage Crossroads. The aggregate fee will be approximately 6% of Crossroads’ effective gross income. II.FUNDING County agrees to serve as the funding agency for the required five-year minimum of operating rental subsidy assistance of up to $1,000,000 annually for Crossroads. Total rent, inclusive of assistance and allowable tenant portions is anticipated to be not less than $1,326,720 annually, as identified in the Homekey Application to HCD. County is committed to providing a combination of resources to ensure financial feasibility, including subsidized rental assistance sized at current Fair Market Rents 1 in Fresno County for the unit mix of Crossroads, pending individual tenant income levels. Parties will mutually agree to discuss and approve any changes regarding use of funds prior to implementing changes. III.GENERAL TERMS Terms. This MOU will become effective upon execution and will continue through Crossroads’ full affordability compliance period. While lease-up is anticipated to begin within 30 days of acquisition, it is important that regular communication is maintained from lease up and through ongoing operations. Confidentiality. The parties to this MOU agree they may have access to, or receive, certain confidential information regarding other parties operations related to Crossroads. The parties agree that confidential information and/or material will not be disclosed without the consent of the other parties, unless disclosure is required by law. Where appropriate, tenant releases of information will be secured before information is exchanged. Confidential tenant information will be handled as required by law. Nondiscrimination. There shall be no discrimination of any person or group of persons on account of race, color, creed, religion, sex, marital status, sexual orientation, age, handicap, ancestry or national origin in the operation of Crossroads by any of the undersigned parties. Amendments. This MOU may be amended only in writing and authorized by the designated representative of the undersigned. Termination. A. Non-Allocation of Funds - The terms of this MOU, and the services to be provided hereunder, are contingent on the approval of funds by the appropriating government agency. Should sufficient funds not be allocated, the services provided may be modified, or this MOU terminated, at any time by County by giving the parties thirty (30) days advance written notice. 1 Per HUD’s Office of Policy Development and Research rev. 9/2020 4 B.Breach of Contract - County may immediately suspend or terminate this MOU in whole or in part, where in the determination of County there is: 1) An illegal or improper use of funds; 2) A failure to comply with any term of this MOU; 3) A substantially incorrect or incomplete report submitted to County; and/or 4)Improperly performed service. County of Fresno : By :~ ,)f-~~~ Ernest Buddy Mendes Chairman of the Board of Supervisors of the County of Fresno ATTEST : By : __ r1'w) _____ ,W=-· ~~----~--""-="'t--"==--+---- Berni ~ (j Clerk of the Board of Supervisors County of Fresno , State of California UP Holdings California, LLC Name : Cullen J. Davis Title : Manager RH Community Builders, LP Name : Title : UPA , LLC Name : Cullen J. Davis Title : Manager rev . 9/2020 5 Wayne Rutledge Chief Executive Officer